December 2012

Tomorrow the Federal Communications Commission (FCC) is testifying at a House Energy and Commerce Committee oversight hearing on spectrum auctions. The hearing is focused on the implementation of the broadcast incentive auction required by the Middle Class Tax Relief and Job Creation Act of 2012 (“Spectrum Act”), though the members will likely address other issues as well, including mobile spectrum aggregation.

I expect several questions regarding the FCC’s commitment to comply with the legislation as enacted by Congress. FCC Commissioner Ajit Pai has questioned whether several of the agency’s proposals in its auction proceeding are consistent with the Spectrum Act. The FCC’s recent proceeding to consider mobile spectrum aggregation has since raised troubling new questions regarding the agency’s willingness to comply with Congressional directives regarding spectrum auctions. If the FCC adopts new limits on spectrum holdings as suggested by its mobile competition reports, Verizon and AT&T would be prohibited from bidding in the incentive auction. Contrary to Congressional intent, the incentive auction would be rigged before it even begins. Continue reading →

Last week, Jim Harper was kind enough to host a book forum at the Cato Institute for Copyright Unbalanced: From Incentive to Excess. Video of the event is now available online.

I presented the case for why conservatives and libertarians should be skeptical of our current copyright system, and Tom Bell, a contributor to the book, made the case for reform. Mitch Glazier of the RIAA, a former Republican senior staffer on the House Judiciary Committee, served as respondent and engaged us in some lively debate.

I hope you will check out the video and that it might compel you to pick up a copy of the book, which also includes excellent essays from Reihan Salam, Patrick Ruffini, David Post, Tim Lee, Christina Mulligan, and Eli Dourado.

Also, this Thursday at 3 p.m. on the Hill, TechFreedom will host a panel discussion on free market thinking on copyright featuring yours truly, Geoff Manne, Larry Downes, Ryan Radia, and Adam Mossoff.

Geoff Manne on copyright

by on December 11, 2012 · 0 comments

Geoff Manne

In last week’s episode of Surprisingly Free, Tom Bell introduced his chapter in Copyright Unbalanced, a new book on the conservative and libertarian case for copyright reform, edited by Jerry Brito. This week, Geoff Manne, lecturer in law at Lewis & Clark Law School and Executive Director of the International Center for Law & Economics, explains how, while also working from libertarian principles, he arrived at a very different view of copyright than either Brito or Bell.

Taking an economic approach to property rights, Manne argues that there is a necessary tradeoff between incentive to create and widespread access. While Manne does recognize the value of widespread use, he says that its benefits must be weighed against the potential breakdown in specialization of labor and the value added by commercialization.

According to Manne, just because someone has exclusive rights to something, doesn’t mean that it won’t be optimally distributed, and, in fact, the highest value ownership right tends to transfer from the creator to the users over time.

Manne concludes that if the government can have any important role, it’s the creation and enforcement of property rights, including copyright, and that that may necessitate new copyright laws.

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Earlier today on Twitter, I listed what I thought were the Top 5 “Biggest Internet Policy Issues of 2012.” In case you don’t follow me on Twitter — and shame on you if you don’t! — here were my choices:

  1. Copyright wars reinvigorated post-SOPA; tide starting to turn in favor of copyright reform. [TLF posts on copyright.]
  2. Privacy still red-hot w ECPA reform, online advertising regs & kids’ privacy issues all pending. [TLF posts on privacy.]
  3. WCIT makes Internet governance / NetFreedom a major issue worldwide. [TLF posts on Net governance.]
  4. Antitrust threat looms larger w pending Google case + Apple books investigation. [TLF posts on antitrust.]
  5. Cybersecurity regulatory push continues in both legislative (CISPA) & executive branch. [TLF posts on cybersecurity.]

Lists like these are entirely subjective, of course, but I am basing my list on the general amount of chatter I tended to see and hear about each topic over the course of the year.

What do you think the top tech policy issues of the year were?

When CLECs say “packet mode,” don’t let the doublespeak fool you. They are asking for heavy-handed economic regulation of the Internet itself, just like many countries at the ITU.

Last week, I wrote about the failure of the CLECs to provide consumers with the additional choices in communications services Congress had envisioned in 1996. I noted that, now that the antiquated telephone network is about to sunset, CLECs must bear responsibility for their own decisions to forgo investment in their own infrastructure and rely on lines leased with temporary government subsidies. The desperation of CLECs to avoid this reality is apparent in their use of doublespeak to conceal their true intent: convincing the FCC to regulate the Internet like plain old telephone service. Continue reading →

On Wednesday, the Subcommittee on Communications and Technology will conduct an oversight hearing of the implementation of spectrum auctions by the Federal Communications Commission.

The subcommittee members ought to consider the fact that although the mobile wireless industry faces an acute shortage of spectrum (“broadband spectrum deficit is likely to approach 300 MHz by 2014”), the FCC risks getting distracted and mired in a pointless effort to leverage its spectrum auctioning authority to manipulate the structure of the mobile wireless industry.

In mid-2011, former Commissioner Michael J. Copps warned of “darkening clouds over the state of mobile competition … we find ongoing trends of industry consolidation.”  As Copps saw it, increasing concentration will lead to higher prices for consumers.  His solution was for the market to have more competitors that look and perform like AT&T and Verizon Wireless.

Since Congress failed to prevent the FCC from engaging in what the late Alfred Kahn once called “oxymoronic efforts to promote competition by regulation” when it adopted the Middle Class Tax Relief and Job Creation (JOBS) Act in February, the path was clear for the FCC to act on Mr. Copps’ pessimism.  The commission issued a Notice of Proposed Rulemaking in late September for establishing caps on mobile spectrum holdings.  The NPRM is designed to eliminate AT&T’s and Verizon Wireless’ access to additional spectrum they need in the short-term to meet growing demand for mobile broadband services. Continue reading →

Rather than invest and deploy new networks offering millions of consumers with additional choices for high speed Internet access, CLECs are investing in the regulatory process in hopes the FCC will save them from the inconvenience and expense of transitioning to all-IP infrastructure. The FCC should not allow the self-interest of CLECs to stand in the way of the IP-transition or the delivery of high speed Internet services to millions of residential consumers who demand more choice.

Shortly after AT&T announced “Project Velocity IP,” its plan to invest an additional $14 billion to provide high-speed Internet access to 99 percent of customer locations in its wireline service area, I blogged about the broad consensus among policymakers, pundits, and industry players in support of the announcement. But, “you can never please all of the people all of the time.” Now that the initial buzz around the announcement has abated, the inevitably unpleased few have gone on the offensive.

The few who cannot be pleased by Internet transformation are “competitive local exchange carriers,” also known as “CLECs.” These companies were created in the mid-1990s to provide both residential and business consumers with an additional choice for telephone service, but after the dot-com bubble burst, CLECs chose to limit their offerings to more lucrative business customers in downtown metro areas. They typically do not offer service to residential consumers or businesses that demand additional options in more suburban and rural areas.

While companies that serve all types of American consumers are investing in the transformation of their outdated telephone systems into the all-Internet protocol (IP) infrastructure of the 21st Century to deliver high-speed Internet services to residential consumers, CLECs claim the IP-transition is a “waste of resources” and a “distraction.” Rather than invest and deploy new networks offering millions of consumers with additional choices for high speed Internet access, CLECs are investing in the regulatory process in hopes the FCC will save them from the inconvenience and expense of transitioning to all-IP infrastructure. The FCC should not allow the self-interest of CLECs to stand in the way of the IP-transition or the delivery of high-speed Internet services to millions of residential consumers who demand more choice. Continue reading →

Someone should consider making a movie about wasteful state-based film industy subsidies. It has become quite a cronyist fiasco in a very short period of time.

Some background: State and local tax incentives for movie production have expanded rapidly over the past decade. These inducements include tax credits, sales tax exemptions, cash rebates, direct grants, and tax or fee reductions for lodging or locational shooting. In 2002, only five states offered such inducements for movie production. By the end of 2009, forty-five states had some sort of incentives in place to lure film producers.

In 2010, the film industry received an estimated $1.5 billion in financial commitments from these programs. Unsurprisingly, these incentives have proven very popular with movie studios. Of the nine motion pictures that were nominated for Best Picture at the Academy Awards in 2012, five had received taxpayer-funded rebates, tax credits, and subsidies by state governments. “The Help” received a Mississippi spending rebate of $3,547,780 and “The Tree of Life” received $434,253 from Texas. In February 2012, Best Picture-nominee “Moneyball” received as much as $5.8 million from the state of California. It had grossed over $75 million at the box office. More recently, the biopic “Lincoln” received roughly $3.5 million in tax incentives from the Virginia Film Office.

Many state and local governments offer these inducements in the hope of attracting new jobs and investment; other simply seek to bill themselves as “the new Hollywood.” As William Luther of the Tax Foundation notes, “From politicians’ point of view, bringing Hollywood to town is the best of all possible photo opportunities—not just a ribbon-cutting to announce new job creation but a ribbon-cutting with a movie or TV star.” But it seems as if the glamor and prestige associated with films and celebrities have trumped sound economics since there is no evidence these tax incentives help state or local economies. Continue reading →

Tom Bell

Tom W. Bell, professor of law at Chapman University and author of the concluding essay in Copyright Unbalanced, a new book edited by Surprisingly Free’s own Jerry Brito, discusses the ways in which copyright has evolved over time and why reform is vital.

Bell differentiates copyright from other types of property, arguing that conflating the two terms causes great confusion amongst laypeople and, over time, corrodes the value placed in tangible property rights. According to Bell, copyright is a privilege created by statute that doesn’t exist in a state of nature and is not recognized by common law.

As a special type of economic good, copyright must be treated differently than tangible property rights, according to Bell, who outlines five proposals for copyright reform.

While Bell is not opposed to copyright, he argues that copyright enforcement has gone too far, and lawmakers should structure policies to lead us towards a world in which we conceivably do without it.

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[Updated 7/10/14: See new addendum at bottom. Updated 4/28/13: Included links to several things + started list of additional resources at end.]

Each year I am contacted by dozens of people who are looking to break into the field of information technology policy as a think tank analyst, a research fellow at an academic institution, or even as an activist. Some of the people who contact me I already know; most of them I don’t. Some are free-marketeers, but a surprising number of them are independent analysts or even activist-minded Lefties. Some of them are students; others are current professionals looking to change fields (usually because they are stuck in boring job that doesn’t let them channel their intellectual energies in a positive way). Some are lawyers; others are economists, and a growing number are computer science or engineering grads. In sum, it’s a crazy assortment of inquiries I get from people, unified only by their shared desire to move into this exciting field of public policy.

I always do my best to answer their emails, calls, and requests for meetings. Unfortunately, there’s only so much time in the day and I am sometimes not able to get back to all of them. I always feel bad about that, so, this essay is an effort to gather my thoughts and advice and put it all one place so that I will at least have something to send these folks. Perhaps I’ll try to update it over time.

#1) Understand that Specialization Matters

I don’t want to bury the lede here, so let me start with the most important piece of advice I share with everyone who contacts me: specialization matters. When I got started in the sleepy field of information technology policy back in 1991, it was possible to be a jack-of-all-trades. There were only a few issues that really mattered, and most of them were tied up with traditional communications and media policy. If you knew a little something about telephony, universal service subsidies, spectrum policy, and broadcast regulation, then you could be an analyst in this field. There were only a handful of people in the think tank world back then who even cared about such issues. Continue reading →